In order to calculate the real interest rate, simply:
A. add the rate of inflation to the nominal interest rate.
B. divide the nominal interest earned by the rate of inflation.
C. subtract the rate of inflation from the nominal interest rate.
D. subtract the nominal interest rate from the rate of inflation.
Answer: C
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The exit of existing firms from an industry will very likely
A. shift the industry supply curve to the left. B. cause the market price to rise. C. eliminate the losses of existing firms in the industry. D. All of the responses are correct.
Diamonds are considered:
A. a renewable resource. B. a nonrenewable resource. C. physical capital. D. technology.
The economist who argued that most prices in a mixed economy are set by the nation's largest corporations was
A. Adam Smith. B. Karl Marx. C. John Maynard Keynes. D. John Kenneth Galbraith.
The famous historical example of the commitment strategy used by Cortes against the Aztecs is sometimes referred to as:
A. "friendly fire." B. "burning your boats." C. "putting all your eggs in one basket." D. "burning your bridges."